The Indonesian Employers' Association (APINDO) has stated that import duty incentives for geothermal equipment will drive further investment in the sector. APINDO’s Vice Chair of Public Policy, Chandra Wahjudi, highlighted Indonesia's significant geothermal energy potential—around 24,000 MW or approximately 40% of the world’s geothermal reserves. According to Chandra, import duty exemptions are essential for geothermal equipment due to the substantial investment and high risk involved in developing this sector. "Indonesia’s vast geothermal energy potential has not been optimally harnessed, partly because of the significant investment required," Chandra told Kontan.co.id on Sunday, November 10.

Chandra further explained that maximizing geothermal potential faces challenges, including high investment costs, lengthy development processes, and limited domestic technology. This limitation necessitates importing most equipment, making import duty exemptions highly beneficial for businesses. "Duty-free import policy will undoubtedly attract more investment in this sector," he added. Previously, the government introduced tax incentives for geothermal businesses, but Chandra acknowledged that geothermal development is more complex than other renewable energy sectors. Under Ministry of Finance Regulation No. 81 of 2024, the government now allows duty exemptions for 19 types of imported goods, including geothermal equipment, which expands on the 17 types covered under the previous law.

Source: https://industri.kontan.co.id/news/insentif-bea-masuk-dorong-investasi-panas-bumi-di-indonesia